LawSourcing Blog

The New Jersey Star Ledger recently featured an article about the increasing number of lawyers working on a “temp,” project or contract basis. Among other things, the article discusses why the number of temporary lawyers is growing:

From mega-firms dealing with major trials, to smaller ones with a little too much work, to corporate legal departments not quite ready to make another full-time hire, there is a cast of lawyers increasingly available to work on a particular case or project for a couple of weeks or months.

Temporary lawyers allow firms to pick up some extra legal help without paying benefits and bonuses, said Anne Dalena, of Strategic Legal Solutions in Morristown.

“It’s becoming larger, it’s becoming better known, it’s becoming more acceptable,” said Edward Poll, who runs LawBiz Management in California.

The article also discusses why lawyers choose project-based temporary work over full-time positions:

For a good many others, temp work is a lifestyle choice that allows more personal freedom, such as starting a family, said Nancy McMillin, 38, of Ewing, who had three children as she temped over the past four years.

“They say, ‘I want to have a life again.’ The practice of law in a law firm can be a very difficult existence. You give your heart and soul to it and forget about seeing your family,” said David Garber of Princeton Legal.

Vlad Portnoy passed the bar two years ago and has temped ever since.

It’s meant long hours doing document reviews that aren’t always intellectually fulfilling, he said. But the money is good, and it made sense for personal reasons. The 30-year-old Jersey City resident had responsibilities to aging family members, and temping was the only way to get hours that made it possible.

* * *

“It’s not a career,” said Portnoy, who is now looking for a full-time position but will keep temping in the meantime. “I know so much about so many things right now that I really otherwise would never have know.”

The temping lifestyle certainly isn’t for everyone, but neither is the Biglaw lifestyle. Expect temping to continue gaining traction as more clients send out project-based work rather than steady, consistent workstreams.

For some lawyers, temping is tempting [NJ Star Ledger via LawBiz]

David Meister, a prominant author of several books about professional service providers, recently posted a blog entry that discussed how to market yourself when only doing “one-off” projects (i.e., where you are retained for only one project, not for multiple projects in an ongoing relationship). A reader inquired about whether there are marketing activities that would be useful when looking for one-off projects rather than repeat business clients.

Among a number of suggestions, Maister states that it’s very important factor to have a webiste with “lots of content” so that people who don’t know you can see what you have to offer. Interestingly, in a later comment to Maister’s blog post, Maister then suggests to look at the situation from the perspective of the buyer of the services. He explains that in a one-off transaction there’s higher risk (because you don’t get a second chance), you have to trust a stranger who you’re hiring, and you really need the referrals of others to reduce nervousness and insecurity.

So, when a buyer is hiring a service provider for a one-off project, that buyer needs to know that the service provider is trustworthy and will stand behind their work. eBay recognized this in its infancy and created a community feedback mechanism to allow members to police themselves. By rating each other, members have the incentive to provide exactly what they are offering so they can build their credibility and become trustworthy members of the community. For the most part, however, eBay involves the sale of products, not services.

Building this credibility on the services side historically has occurred in the “offline” world (e.g., through word of mouth, referrals, etc.). However, over the past few years, online eBay-like communities for the buying and selling of services, as opposed to products, have been created. Through these online communities, buyers of services are able to quickly and efficiently hire service providers for one-off projects. Perhaps these online communities, where buyers can immediately look at a service provider’s bio, work history, and feedback from other buyers, will become the best way to market youself for one-off projects.

Marketing in a One-Off Industry [www.davidmaister.com]

Freelance lawyers work on a project basis, typically at a much lower rate than lawyers at “traditional” law firms. Freelance lawyers typically set their own schedule and pick and choose the projects they work on. They might do project work for in-house counsel, or they might be hired by a lawyer to handle specific projects (e.g., only specific aspects of a certain case or transaction). It’s not uncommon for a freelance lawyer to spend part of his or her time working on legal projects, and the other part pursuing other business interests.

Geoffrey Gussis, who runs the InHouse Blog - News for Inhouse Counsel, republished an article by James Hartt about freelance lawyers and whether they are a valuable alternative for in-house counsel. The argument against freelancers, says Hartt, is that in-house lawyers have a fear that a freelancer’s work won’t be of the same quality as that found at a traditional law firm. However, many freelancers are lawyers who were trained in those very same law firms, but who are looking for more flexibility and freedom with their schedule. Hartt argues that companies could save a lot of money on “everyday issues and tasks” if they would set aside their fears and work with freelancers whom they feel comfortable with. Indeed, both in-house counsel and smaller law firms could become more efficient if they could find reasonably-priced, qualified freelancers to handle one-off legal projects.

Freelance Attorneys: A Valuable Alternative For In-House Counsel . . . Sometimes [www.inhouseblog.com]

The Professional Services Marketing Blog cites a study that says only 40.7% of law firm associates believe they’ll still be with their current firms in five years. So where are the other 59.3% of associates headed? Corporate positions, public service, and other firms each get a sliver (between 7% and 10% each), but 31.8% of associates simply don’t know where they’ll be in five years. A few will probably still be in law practice, but many will likely be elsewhere. Let’s face it: if they don’t like law practice enough today to say they’ll still be doing it in five years, they probably won’t be. At least not in the traditional sense.

This is relevant to legal outsourcing for two reasons: first, firms will need to find ways to replace the associates that leave. As the pool of associates decreases (due to lower birth rates, lower law school enrollment, and higher exit rates from firms), law firms might look more and more to legal outsourcing services to fill the gap. Certainly some of this work will be offshored, but some will — by necessity or fear — stay close to home. Because of this I think we’ll see more localized legal outsourcing opportunities pop up around the world.

Second, some of these associates might leave law firms not because they hate the law, but because they hate the law firm. Many of these associates will likely join the solo or contract-attorney crowd. This will increase the number of available attorneys to work with firms on a project-by-project basis, essentially creating a group of “consultant attorneys.” If enough of the associates join the ranks of this consultant attorney class, it might radically alter how law firms staff their projects. Instead of pulling in 15 lawyers from the firm’s corporate, IP, labor and employment, and environmental practice groups to staff an M&A transaction, the firm might pull in five lawyers from the firm and 10 outside “consultant attorneys.” This would essentially cause law firms to act much like many in-house counsel act now; that is, they oversee, coordinate and manage the project, but outsiders do much of the heavy lifting.

Only time will tell if the legal profession experiences an associate shortage. But if it does, how will it impact you?

Generation Gap Hurts Law Firm Marketing [Professional Services Marketing Blog]

Over the last 24 months I’ve had several friends leave their big law firm practices to launch a solo or small firm practice. With the exception of one person, all of them say that it’s the best thing they’ve ever done and they can’t believe it took them so long to make the jump. Ironically, all of them continue practicing exclusively in the specialized areas they developed while at their big firms — e.g., labor and employment, technology transactions, and corporate finance.

Carolyn Elefant of MyShingle.com noted this phenomenon in a recent blog entry. As an example she cites Walter James, an environmental lawyer that left Biglaw practice in 2004 to start a successful solo environmental practice. Walter comments that some of the best environmental work is done by solos and small firms, at much lower rates than Biglaw can offer.

Carolyn closes her entry with this:

So if you’re toiling at a large firm, dreaming of the solo life, think of ways that you can take your $400/hour expertise (of which you may see 25 percent, if that much) and transplant it at your own law firm.

Definitely something worth thinking about for anyone considering a jump from Biglaw to Small-law.

You Can Take It [BIGLAW Practice] With You [MyShingle.com]
SMALL-LAW v. BIGLAW [Environmental Crimes Blog]

Pricing, estimates and finances are some of the most important — and some of the most difficult — aspects of running a freelance business. Lack of knowledge in these three areas can break even the best business. Fortunately, good suggestions and sage advice are plentiful on the web.

For example, “The Secret to Small Business Success” at the Firewheel Design Blog discusses how to set pricing. Among other things, it gives a formula to you help set a billable rate:

If you’re starting out on your own, and you need help arriving at a billable rate, here’s a good formula: Add up all your expenses (equipment, software, phone, DSL, rent, taxes, etc.). Then add to that what you need (or would like) to get paid over a years time. If your expenses come to $20,000 and you’d like to get paid $80,000, you need to be able to foot the bill for $100,000 in a year’s time. On top of that you want a profit. 15 percent is a good place to start. So $115,000 is your magic figure.

Now let’s assume you want four weeks of vacation and/or sick time. This leaves you with 48 weeks or working time. While it may sound like a pipe dream (it is), let’s say you only want to work 40 hours a week. Of those 40 hours, you can chock up 16 hours (or two days a week) to non-client work. Plan on this. You’ll need to market yourself, design your own website, chase down leads, and pay the bills.

This leaves you with 24 “billable” hours in a week, or just over 1150 billable hours in a year. So what do you need to bill per hour to pull your $115,000? Well, dividing your $115,000 by 1150 tells you $100 an hour is your billable rate. It’s that simple. That may sound like a lot to you, but if you do quality work, your clients will not see this as an expense. They’ll see it as an investment.

Shaun Andrews also has an excellent entry that discusses Estimates, Invoicing and Billing, and Retainers. As part of his entry, he describes the three most common types of billing options:

There are a few methods for invoicing:

1. Calendar Based Invoicing You send out invoices at the same time every month, say the 1st and 15th.
2. Milestone Based Invoicing You send out invoices at certain milestones of the project, say project start, launch of development site, and project completion.
3. One-time Invoices You send out an invoice for the entire project price at one time, either at the start of the project or the end of the project.

No obviously these three methods aren’t all the possibilities, but they’re the three I think are the most popular. Personally I subscribe to the Milestone Based method. I send out invoices immediately after I receive a signed contract, and right before I send final files.

Many lawyers use Calendar Based Invoicing, but there seems to be a growing trend in favor of Milestone Based Invoicing. Use what works best for you and your clients.

Finally, Javaddicts has an informative article that describes everything related to freelance finances — from start-up costs to monthly expenses to taxes. It also includes some practical advice about what to do if the money runs out:

If you don’t have enough money to pay your bills, there’s no need to freak out. You’re not alone for sure. There are some things you can do. See what payments you can postpone. Ask your customer if she can give you some money in advance, borrow something from your spouse (I recommend not borrowing money from friends, unless there’s no other way, and both of you are aware that you might not be able to pay it back right away) or family. Or maybe you can live with your checking account being in debt for a while.

For the most part, there’s always a way out, even if it means to get a new day-job. When you’re out of luck money-wise, it’s best to have a realistic view at all your options, even the ones you don’t necessarily like.

Money can be a challenge for any business. But with the right advice and the right tools, freelancers can develop the financial skills to make money work for them instead of against them, allowing them to grow their business and make a comfortable living.

The Secret to Small Business Success [Firewheel Design]
The Business Side of Things [shaunandrews.com]
Handing Finances [Javaddicts]

Lately I’ve been curious about an online certification service called Brainbench. The Brainbench.com site provides a number of certification exams (over 600, by last count) in areas ranging from Excel Spreadsheets to Legal Research to Web Development Concepts. Exams cost around $50 apiece, or users can opt to sign up for a subscription at a reduced rate. The site also offers a number of exams free of charge.

The first few times I saw Brainbench I was skeptical and wondered if it was legitimate. A little online research has convinced me that it is. My investigation also taught me that Brainbench is among the most prestigious and widely recognized of the publicly available certification programs. Note that the operative phrase here is publicly available certification programs. Since the Brainbench exams are administered online and are not proctored (i.e., no one is monitoring you while you take the exam), it is nearly impossible to tell when people are cheating. Jeff Dean, a freelance IT writer, noted this when he said:

Probably the biggest criticism of Web-based testing is the ease with which examinees can cheat. It’s an honor system, and the advertised certifications could be considered suspect unless verified by the hiring employers. However, for paying Brainbench client companies, this is easily done during the interview process. Brainbench offers verification exams as a service to their clients, in both a short and long form, with immediate e-mail notification of results.

The cheating problem makes Brainbench certifications (and other Web-based programs) a dubious competitor for proctored certification techniques, and savvy employers won’t be fooled. However, as a recruiting vehicle using the freely administered exams, and as an assessment system with the verification exams, Brainbench offers a credible, convenient, and substantive service to both examinees and employers. Those employers who need to quickly and objectively evaluate the skills of applicants may be very interested in this technique.

In light of this, an exam will have a different value depending on where it is taken. For instance, exams taken in the privacy of people’s own homes will be more valuable to the test takers, since people can use them as a simple way to measure their skill levels on various topics; however, due to the possibility-of-cheating factor, these exams will be less valuable to potential employers. Conversely, exams taken while an employer is monitoring will be very valuable to the employer, but might have less value to the test taker since the pressure and associated stress will be significantly higher, possibly lowering the score.

Brainbench seems to be a good way people to benchmark their knowledge and skills and figure out where their strengths and weaknesses are. Don’t expect people to do cartwheels over the certifications, but it certainly can’t hurt to have a couple in your bio.

At best, a Brainbench certification might help you land a client. At worst, you’ll spend 30 minutes on an exam and end up with a better inventory of your skills. So what are you waiting for? Time to benchmark your brain.

Brainbench

Neil Dixon is a freelance designer that occasionally has trouble collecting payment from his clients. His solution: a nice, informal note asking the client to bring the account current. He sent the note right after the official 30 day payment term had run:

Last month . . . just after the official 30 days’ payment had passed, I popped a pleasant letter in the post asking for the account to be brought up to date. This wasn’t a statement or reminder type letter, just a ‘Hey, I noticed the invoice is due, we’d really love to have it all settled, thanks’. Or words to that effect. Hey presto! A week later, two weeks earlier than is ‘normal’ for them, the payment turned up.

He figured if it works once, he might as well try it again, but this time with a different client. And this time he sends the note to the client before the invoice is actually due. The results are better than he expected:

The first small invoice with them earlier in the year took a little nudging and hassle to get sorted, for one reason or another. So with the payment date of the second, much larger invoice approaching last week, I though it wouldn’t hurt to stick a little reminder in, this time before the due date. “Hey, I’d really appreciate you keeping your account up to date and paying this invoice on time.’ (or words to that effect but in a very friendly, non-pressured, businesslike manner). Bingo! less than a week later and pretty much smack on schedule, the invoice was paid.

Sometimes all it takes is a quick reminder to move your invoice to the top of the payables stack.

You’ve done the work. Now use friendly reminders to make sure you get paid on time.

Easing the Money In [a minor technicality]

Shaun Andrews embarked on his freelance career three months ago, and posted a short article about the lessons he’s learned in the process. (Shaun is a web engineer, but his comments apply to nearly all types of freelancers.)

Here are his top three observations together with a portion of his comments:

1. Never turn down work unless your sure you don’t need it. The worst thing that can happen to a freelancer is not having anything to do. . . .

2. Know when to say “No.” to work. Not having any work is bad, but having too much work can be just as bad. Though, having too much work IS a good problem with an easy solution, sub-contractors. It’s important to have a few sub-contractors lined up that you can count on. . . .

3. Client work can take up all your time, if you let it.

Shaun includes other tips as well, including one on using a blog as a selling tool. One of his readers posted a comment that mentions two additional tips worth sharing:

[I]t’s a good idea to get the client deliver you all the neccessary material BEFORE you start and not during the project since this really can make the project last twice as long and can really affect your motivation.

. . . [T]ry to avoid situations where you count on finishing the project on the exact date and depending on the payment (for whatever reason) for the project after completion. It usually rarely works out that way and if you want to enjoy your work and projects, avoid this as much as possible.

Great advice.

3 months on my own [shaunandrews.com]

Freelancers sometimes complain that they work hard to respond to job postings, but they never get selected. Josiah Mackenzie has some good suggestions on how freelancers can win more jobs. Among the suggestions:

Customize Your Proposal
This shows you’ve taken the time to read it. If it is a larger job, consider tailoring your resume to match the job. If a freelancer submits a customized proposal to me, I know she cares enough about my project to do a good job on it.

Perfect the Art of Persuasive Writing
Your bid is essentially a sales letter. Those who integrate the art of persuasion in their proposals are far more likely to win jobs than those who do not. Even if you don’t consider yourself an expert in sales letter writing, don’t be discouraged. The vast majority of freelancers put no effort into this, and their proposals read something like this: “Hey, I can do this job. Contact me for more info.” Hardly persuasive. Even a small amount of time invested in writing a proposal that sells your services will put you ahead of the rest who do nothing.

In order to save time, I recommend spending the time needed to craft two or three paragraphs of persuasive content that you can use as a “template”. Then take that and modify it for every bid you make.

Other suggestions include “Attach Examples from Your Portfolio,” “Encourage Communication,” and the ever important “Follow Up.”

Josiah’s most important observation:

Employers are worried about losing time and money with freelancers who don’t perform as promised. The key to successful bidding on freelance jobs is to show employers that you will provide quality work for them within their time and money budgets.

Ultimately it’s about building trust with the prospective customer. If the prospect trusts that the freelancer will do a good job, meet deadlines and stay in budget, then the freelancer will almost certainly get the prospect as a new customer. A little assurance and personal attention can go a long way.

How to Win Contracts As A Freelancer [josiahmackenzie.com]